With local sales tax receipts showing a slight increase in August (as reported in last week’s edition of The SUN), only the third increase in almost two years (with March 2009 showing only a .19 percent increase), it was the retail sector that accounted for the bulk of August’s positive numbers.

In August, sales tax revenue rose 3.25 percent relative to the same month last year. In May, sales tax revenues posted a 5.97 percent increase from May 2009. While 2010 has continued to show diminishing sales tax revenues, those decreases have significantly slowed from precipitous drops exhibited in 2009.

The retail sector in Archuleta County performed exceptionally well this year, a primary contributing factor to August’s positive numbers.

As reported in The SUN last week, July is the second best month for sales tax revenues, while August is the fifth best month. That difference is evident in the 2010 reports — overall sales tax collections were down 7.1 percent in August compared to July collections.

However, August’s retail collections were down just 5.95 percent from July and were up 9.38 percent from August 2009.

The local retail situation reflects conditions on the national level that have shown a slight improvement over the past few months. Last month, the Commerce Department reported that August showed a .7 percent increase in retail sales, the largest since March. That report was followed last Friday by a Commerce Department announcement that retail sales rose .6 percent in September. A similar uptick in July followed declines in May and June, ­—news that had some analysts concerned that the country was in danger of sliding back into a recession.

However, while acknowledging that the national economy is growing, most economists caution that continued high unemployment and stagnation in other sectors will prevent a large-scale expansion from taking off.

Two weeks ago, the Labor Department reported that the nation’s unemployment rate remained stuck at 9.6 percent in September. During that month, the country saw a net loss of 95,000 jobs. For over 14 months, unemployment has been at or above 9.5 percent, the longest period of unemployment since the Great Depression.

The lack of growth in other sectors (especially housing and construction), coupled with high unemployment, has led most analysts to predict that the economy will remain below 2 percent growth for the remainder of this year.

The U.S. saw a growth rate of just 1.7 percent in the second quarter of this year.

Similarly, while Archuleta County has experienced a slight economic rebound during the past few months, indications are that a vigorous turnaround is far from certain or probable. Nonetheless, some bright spots in August’s numbers suggest an economy slowly limping towards recovery.

Revenues from construction had a strong showing in August, up 22.38 percent from the same month last year and an increase of over 42 percent from July 2010. However, construction overall for this year remains down nearly 70 percent compared to revenues averaged out over the previous six years.

Accounting for about 15 percent of the local economy in 2007 (according to the 2009 Region 9 report), construction has amounted to just over 1 percent of the area’s economy in 2010.

Manufacturing continues to show itself as the fastest growing sector of the local economy, with sales tax revenues up over 31 percent in August from the same month last year. Accounting for less than 1 percent of the local economy five years ago, manufacturing has amounted to almost 5 percent of sales tax revenues in 2010.

Manufacturing revenues have increased over 60 percent from last year and over 30 percent of the previous five-year average.

Perhaps showing a correction from steady growth over the past two years, the accommodation and food services sector showed a slight decrease in revenues from the same month last year: down 8.75 percent from August 2009 and down 16.7 percent from this past July.

Across the previous five-year’s average, sales tax receipts for accommodations and restaurants have been up almost 11 percent; August’s decrease represents just a slight dip when factoring in the previous five year’s receipts.

While acknowledging the importance of tourism in Archuleta County, the Pagosa Springs Community Development Corporation has indicated that the county cannot hang its hat on the strength of a single industry, if the area hopes to dig itself out of an economic hole (largely created by a depressed construction industry.)

To those ends, CDC Executive Director Steve Vassallo expressed optimism on Tuesday, stating that several prospects were actively looking at Pagosa Country as a place to set up shop.

“We’ve got some promising developments happening,” he said during a phone interview. “We’ve got some activity going on.”

In the meantime, while recent sales tax revenues indicate a hint of recovery, that situation will require many more positive reports to warrant some optimism.

The Colorado Department of Labor and Employment will release unemployment figures for Archuleta County in September. The Colorado Department of Revenue will release sales tax figures for the county on November 12.

If both of those reports show continued improvement, 2010 may point to a better economy in 2011.